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ChemChina looks to hi-tech acquisition as way forward

By Zhao Hua
Updated: 2009-03-17 16:52

Meetings have become a way of life for Ren Jianxin, president of the China National Chemical Corp (ChemChina). Since the full implications of the world financial crisis became only too apparent, Ren has had 118 of them, each more than two hours long.

Ren has had individual meetings with the management of the company's 118 subsidiaries and the question under discussion at all of them was exactly the same: "How do we survive the current economic downturn?"

Ren said: "In the history of ChemChina we have no experiences in tackling such a deep-rooted crisis. Meeting and exchanging ideas is our only means of developing a policy to ensure the business remains healthy."

The global economic downturn has had a huge impact on China's chemical industry. According to the China Petroleum and Chemical Industry Association (CPCIA), the country's petrochemical industry experienced negative growth in income for December 2008, the first decline in 10 years.

As China's leading chemicals producer, ChemChina has also seen a slowdown in growth since last September. "Prices of our products dropped sharply, and the whole market is declining," said Ren.

Following his meetings with the management of the company's subsidiaries, Ren is more optimistic about the company's business performance this year. "We expect to see 10 percent growth in our sales in 2009," he said.

Compared with the 90 percent increase the company has experienced in the past four years, this year's growth target is relatively small. Ren said the financial targets were agreed after "careful research of the company's portfolio and the current business environment".

This year ChemChina will continue its policy of focusing on production and sales. "We will not close any manufacturing facilities in 2009," said Ren.

The company will also invest in a substantial upgrade of its manufacturing facilities. This major re-investment in the company is a sign of Ren's renewed confidence in its financial wellbeing.

Human resources are another focus for the company this year. Ren said: "No jobs will be cut, and we are welcoming a lot of talented new people to join in us."

ChemChina is also watching the world's other chemical producers' behavior very closely. He said: "Many of them have longer histories than us, and they are more experienced in coping with this kind of crisis. We may get useful guidelines from them."